Garrard Sales Corp. v. United States

O’Connell, Judge,

delivered the opinion of the court:

This is an appeal from a judgment of the United States Customs Court, First Division, C. D. 950, sustaining the action of the Collector of Customs at the port of New York who classified an importation of merchandise from England consisting of automatic record changer units as parts of phonographs and assessed thereon a duty of B0 per centum ad valorem under paragraph 1542 of the Tariff Act of 1930, and overruling appellee’s protest claiming that the merchandise was properly dutiable at 25 per centum ad .valorem as articles having as an essential feature thereof an electrical element or device, such as electric motors, under paragraph 353 of the same act as modified by the trade agreement with the United Kingdom, T. D. 49753.

The statutory provisions of the Tariff Act of 1930 here involved, so far as pertinent, read as follows:

Par. 1542. Phonographs, gramophones, graphophones, dictophones, and similar articles, and parts thereof, not specially provided for, 30 per centum ad valorem * * *.

Par. 353. All articles suitable for producing, rectifying, modifying, controlling, or distributing electrical energy;

electrical telegraph (including printing and typewriting), telephone, signaling, radio, welding, ignition, wiring, therapeutic, and X-ray apparatus, instruments (other than laboratory), and devices; and

articles having as an essential feature an electrical element or device, such as electric motors, * * *

all the foregoing, and parts thereof, finished or unfinished, wholly or in chief value of metal, and not specially provided for, 35 per centum ad valorem.

Paragraph 353 as modified by the trade agreement with the United Kingdom, supra, so far as pertinent, reads:

Electrical signaling, radio, welding, and ignition apparatus, instruments (other than laboratory), and devices, * * * and all other articles suitable for producing, rectifying, modifying, controlling, or distributing electrical energy, and articles having as an essential feature an electrical element or device, such as electric motors, * * * all the foregoing, not specially provided for, finished or unfinished, wholly or in chief value of metal * * * 25% ad val.

Parts, not specially provided for, finished or unfinished, wholly or in chief value of metal, of any articles provided for in any item numbered 353 in this schedule, shall be dutiable at the same rate of duty as the articles of which they are parts.

The evidence discloses that each of the imported articles is a unit composed in chief value of metal which can be used either'in a phonograph or in a phonograph-radio combination for the purpose of automatically changing a record after it has- been played. It is stipulated that each of such articles, as well as the phonograph-radio combination, has “an electric motor as an essential feature and integral part thereof” and that the phonograph-radio combination cannot function as such without the record changer unit.

Counsel for the Government makes the following pertinent statement in its brief:

The article here in question consists of an electric motor to which is attached a turntable suitable for holding phonograph records while being played, a “pick-up head” which, when the turntable revolves, translates the sound track of the phonograph record into electrical impulses of the corresponding audio frequencies, and a mechanism for automatically changing the records after they have been played. None of the units can be used for the purpose for which it was designed unless the output of the pick-up head is set into a suitable audio-frequency amplifier and loudspeaker system, neither of which accompanied any of the units in question upon their importation.

When the unit is installed in a phonograph-radio combination, the radio cannot be operated while the combination is used as a phonograph and vice versa because there is but one amplifying and one loud speaker system in the described combination and those two elements of that system are required to operate either the phonograph or the radio receiving set.

It is stipulated that units such as the Garrard record changers were not imported to the United States prior to 1937, and since that time have been chiefly used in this country in phonograph-radio combinations, the use of such units in phonographs which were not combined with radios being “very minor,” and that the same is true of Such “similar articles” sold and used in the United States on or prior to June 18, 1930.

The electrically operated phonograph-radio combination, according to the testimony, first came on the market in this country about 1925, and was developed by the radio industry “to promote sales and have products which would be something that normal competition wouldn’t-be able to meet, particularly the more expensive units.”

It is not disputed that without the record changer unit the phonograph-radio combination would be just a radio set and that the device is no part of a radio. Appellant contends that for tariff purposes the record changer unit here involved likewise is no part of a phonograph but a part of something other than a phonograph, to wit, a phonograph-radio combination, and that the court below made a reversible error in holding that the imported unit is dutiable as a part of a phongraph or as a part of a similar article under paragraph 1542.

The Government takes the position that although the two mechanisms of the combination are combined in one cabinet and use some parts in common, the phonograph and the radio do not supplement or complement each other but on the contrary each retains its respective identity and so does its parts. Therefore the imported unit here involved is part of a phonograph and dutiable as such or as parts of similar articles under paragraph 1542.

The court below held that the involved combination constituted two separate and independent instruments, that the imported unit must be treated as an entirety, such as a part of a phonograph, that the provision for parts of phonographs and similar articles in paragraph 1542 is more specific than the provision in paragraph 353 for “articles having as an essential feature an electrical element or device” and that the imported merchandise was dutiable under paragraph 1542 as parts of phonographs and similar articles, citing United States v. Dryden Rubber Co., 22 C. C. P. A. (Customs) 51, T. D. 47050; Ralph C. Coxhead Corp. v. United States, 22 C. C. P. A. (Customs) 96, T. D. 47080; Julius Forstmann & Co. v. United States, 28 C. C. P. A. (Customs) 222, C. A. D. 149.

As hereinbefore described, none of the imported articles can be used for the purpose for which it was designed unless the output of the pick-up head is set into a suitable audio-frequency amplifier and a loud speaker system, and it is conceded that the imported record changer is an integral and essential part of a phonograph and radio-combination without which the combination could not function as such.

It is clear that a phonograph and a radio are two separate and distinct articles, and this court has held that two articles designed and constructed so as to be used together does not necessarily make either article a part of the other. United States v. Willoughby Camera Stores, Inc., 21 C. C P. A. (Customs) 322. T. D. 46851.

It is also clear that the phonograph and the radio when combined in a single unit constitute a separate and distinct article which is something more than either. The addition of the radio to the phonograph added an important feature to the phonograph which created a new combination article which is not a phonograph or an article similar thereto within the purview of paragraph 1542. See Thorens, Inc. v. United States, 31 C. C. P. A. (Customs) 125, C. A. D. 261.

Furthermore, a combination phonograph and radio set, such as that here involved, if imported would be dutiable as an entirety and could not properly be classified either as a phonograph or a radio.

It has been suggested that by the use of the language “and similar articles” contained in paragraph 1542, supra, Congress intended to include in that paragraph combination phonograph and radio sets for the reason that a radio and a phonograph are similar in many respects to the articles named.

More particularly, it has been suggested that a combination phonograph and radio, a phonograph, and a radio are all sound-producing articles, that they are all in the same art, are necessarily manufactured and produced in the same places, and therefore the phonograph and radio combinations are “similar articles” to the articles named in paragraph 1542; and that the pertinent legislative history of the provision overwhelmingly supports that conclusion.

A review of the respective tariff enactments regarding the articles enumerated in paragraph 1542, supra, discloses that the tariff act of 1909, paragraph 468, provided for “phonographs, gramophones, graphophones, and similar articles, or parts thereof, forty-five per centum ad valorem”; and that paragraph 374 of the tariff act of 1913 was identical with paragraph 468 of the tariff act of 1909, except that the rate of duty was 25 per centum ad valorem.

Paragraph 1444 of the Tariff Act of 1922 also provided for “Phonographs, gramophones, graphophones, and similar articles, and parts thereof, not specially provided for,” at 30 per centum ad valorem. That paragraph also provided for “needles for phonographs, gramophones, graphophones, and similar articles, 45 per centum ad valorem.”

There is no reference in the Summary of Tariff Information of 1921, page 1189, relative to paragraph 1442 of H. E. 7456, which later became paragraph 1444 of the Tariff Act of 1922, to combination phonograph and radio sets. There the Tariff Commission reported that—

* * * The essential parts of a phonograph are a funnel for receiving the sounds, a diaphragm which vibrates with these sounds and to which is attached a point, and a covered cylinder with which the point makes contact. The Edison diaphragm is iron, the point metallic, and the cylinder covered tin foil. By revolving the cylinder the recorded sound is reproduced. The graphophone applies the phonograph principle of sound record and reproduction, but substitutes a wax cylinder. The term “graphophone,” however, is being supplanted by “phonograph.” * * *

Under the heading “Suggested changes,” the Tariff Commission reported that—

The phrase “and parts thereof” is apparently intended to apply to phonographs, etc., as well as to similar articles. * * *

It will be observed that under the tariff acts of 1909, 1913, and 1922, Congress provided for phonographs, etc., and similar articles and parts thereof. It is clearly evident that by “similar articles” included in those provisions of previous tariff acts, Congress had no intention of including combination radio and phonograph sets, and although Congress in paragraph 1542 of the Tariff Act of 1930 added to the provisions in the previous tariff acts the term “dictophones,” it did not specially include therein combination radio and phonograph sets.

It is our view, therefore, that by the language “and similar articles” contained in paragraph 1542, supra, Congress did not intend to extend the operation of that paragraph to include combination radio and phonograph sets, although the Tariff Commission, in the Summary of Tariff Information 1929, volume 2, page 2111, stated that “Combination phonograph and radio sets are also being produced.”

In other words, Congress was definitely aware at the time paragraph 1542 was enacted in the Tariff Act of 1930 not only that phonographs were being produced but also that combination phonograph and radio sets were also being produced.

Congress did not see fit, however, to include such combinations among the articles specified in that paragraph, although it did amend paragraph 1542 by including dictophones, which record and reproduce sound, within the provisions of the statute so as to conform to a then existing administrative practice in fixing duties thereon. Congressional Record, vol. 72, part 2, 71st Congress, 2d session, January 6, 1930, to January 23, 1930, page 1966.

The Government excuses the omission of the combinations from the statute on the ground that the production of such combinations was in its infancy and that Congress intended to include them within the class of articles similar to those specially provided for in paragraph 1542. Appellant makes the following pertinent statement in its brief regarding the action by Congress:

The inference is rather clear that had it any intention of including the combination instruments it would have done so then and there. The term “similar articles” would in all likelihood have carried dictophones, whereas it is not likely that the combination instruments would have been covered thereby. With this situation before it, Congress, had it intended the combinations to be included, would have named them, for the need to do so was much more apparent than the need for naming dictophones.

Furthermore, as far back as 1925 the Board of General Appraisers (now the United States Customs Court) had occasion to consider and pass upon the application of the provisions for “similar articles” as prescribed in paragraph 1444 of the Tariff Act of 1922, which, with the exception of the provision for dictophones, is identical with the provisions of paragraph 1542, supra. See Brand Co. et al. v. United States, T. D. 40649, 47 Treas. Dec. 113, 115.

In that case it was held that mica disks with a hole drilled in the center and designed for use exclusively as parts of phonographs were properly dutiable as such parts under the specific provision therefor in paragraph 1444, and that similar unpierced mica disks suited for use as parts for radio instruments were not “similar articles” to the articles named in such paragraph. On the point here in question the decision reads as follows:

While in a general sense all of the instruments referred to might be classed as sound-producing mechanisms, we are not prepared to hold that a radio apparatus is a “similar article” to a phonograph, gramophone, or graphophone, as contemplated by paragraph 1444. The latter instruments both record and reproduce sound, whereas the radio, like the telegraph and telephone, merely transmits sounds in a manner which can scarcely be considered as recording or reproducing them. In the ease of the radio the transmission is as direct as one person speaking to another through a speaking tube or through the telephone. There is no recording of sound for the purpose of reproduction. True, there is a marvelous amplification and immediate transmission of sound as in the case of the telephone, but there is no permanent or even temporary record made thereof. We can conceive of an alleged similarity between the radio and the telephone but not between the phonograph and the radio.

It must be presumed that the Congress was fully cognizant of the decision in the Brand Co. et al. case, supra, at the time of the enactment of paragraph 1542 of the Tariff Act of 1930. In view of the decision in that case, it is unthinkable that Congress would have had in mind including combination phonograph and radio sets in paragraph 1542 as an article similar to phonographs. On the contrary, had the Congress intended to include such an article within that paragraph, it would have said so.

Congress certainly knew that a combination phonograph and radio sot was no more a phonograph, or an article similar thereto, than was a radio, or an article similar thereto, and it follows, of course, that if it was not the purpose of Congress to include combination phonograph and radio sets in paragraph 1542, supra, parts of such articles could not have been intended to be coyered by that paragraph.

It might be that if a complete radio and a complete phonograph were imported in a single cabinet, each would be a separate entity for tariff purposes. However, in the instant case, neither the radio nor the phonograph is complete without the frequency amplifier and the loud speaker which is common to both and which is necessary for the operation of each.

It is to be understood, of course, that the decision in this case is limited to the facts presented by the record.

For the reasons stated, the judgment is reversed and the cause remanded for proceedings consistent with the views herein expressed.